Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

COHEN & STEERS ADVANTAGE INCOME REALTY FUND, INC.
................................................................................
(Name of Registrant as Specified In Its Charter)

................................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11

(1) Title of each class of securities to which transaction
applies:

............................................................

(2) Aggregate number of securities to which transaction
applies:

.......................................................

(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):

.......................................................

(4) Proposed maximum aggregate value of transaction:

.......................................................

(5) Total fee paid:

.......................................................

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

.......................................................

(2) Form, Schedule or Registration Statement No.:

.......................................................

(3) Filing Party:

.......................................................

(4) Date Filed:

.......................................................

COHEN & STEERS ADVANTAGE INCOME
REALTY FUND, INC.
757 THIRD AVENUE, NEW YORK, NEW YORK 10017
(212) 832-3232

-------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 2002

-------------------
To the Stockholders of
COHEN & STEERS ADVANTAGE INCOME REALTY FUND, INC.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
'Meeting') of Cohen & Steers Advantage Income Realty Fund, Inc. (the 'Fund')
will be held at the offices of the Fund, 757 Third Avenue, 20th Floor, New York,
New York 10017, on April 24, 2002 at 10:00 a.m., for the following purposes, all
of which are more fully described in the accompanying Proxy Statement dated
March 18, 2002:

1. To elect seven Directors of the Fund, to hold office for a term of
one, two or three years, as the case may be, and until his or her successor
is duly elected and qualified;

2. To ratify or reject the selection of PricewaterhouseCoopers LLP as
independent certified public accountants of the Fund for its fiscal year
ending December 31, 2002; and

3. To transact such other business as may properly come before the
Meeting or any adjournment thereof.

The holders of the Fund's Auction Rate Cumulative Preferred Shares will have
equal voting rights with the holders of Fund's common stock (i.e., one vote per
share), and will vote together with the holders of common stock as a single
class on the proposal to elect Directors, except that the holders of Auction
Cumulative Preferred Shares, voting separately as a class, will separately vote
for the election Mr. Cohen and Mr. Smith, who have been designated as
representing the holders of the Fund's Auction Rate Cumulative Preferred Shares
(see 'Proposal One: Election of Directors,' below).

The Directors have fixed the close of business on March 11, 2002 as the
record date for the determination of stockholders entitled to notice of and to
vote at the Meeting or any adjournment thereof. The enclosed proxy is being
solicited on behalf of the Directors.

By order of the Board of Directors,

ROBERT H. STEERS
ROBERT H. STEERS
Secretary

New York, New York
March 18, 2002

- -------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT

PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, SIGN
AND DATE IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO SAVE THE FUND ANY ADDITIONAL EXPENSE OF
FURTHER SOLICITATION, PLEASE MAIL YOUR PROXY PROMPTLY.
- -------------------------------------------------------------------------------

PROXY STATEMENT
TABLE OF CONTENTS

<Table>
<Caption>
PAGE
----

Introduction................................................ 1
Proposal One: Election of Directors......................... 2
Proposal Two: Ratification or Rejection of Selection of
Independent Certified Public Accountants.................. 5
Fees Paid to PricewaterhouseCoopers LLP..................... 6
Certain Information Regarding the Investment Manager and the
Administrator............................................. 6
Officers of the Fund........................................ 6
Submission of Proposals for the Next Annual Meeting of
Stockholders.............................................. 7
Other Matters............................................... 7
Votes Required.............................................. 7
</Table>

PROXY STATEMENT
COHEN & STEERS ADVANTAGE INCOME
REALTY FUND, INC.
757 THIRD AVENUE
NEW YORK, NEW YORK 10017
(212) 832-3232

-------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 2002

-------------------

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Cohen & Steers Advantage Income
Realty Fund, Inc., a Maryland corporation (the 'Fund'), to be voted at the
Annual Meeting of Stockholders of the Fund, to be held at the offices of the
Fund, 757 Third Avenue, 20th Floor, New York, New York 10017, on April 24, 2002
at 10:00 a.m., and at any adjournments thereof (collectively, the 'Meeting').
Such solicitation will be by mail and the cost (including printing and mailing
this Proxy Statement, meeting notice and form of proxy, as well as any necessary
supplementary solicitation) will be borne by the Fund pursuant to the terms of
the investment advisory agreement described below. The Notice of Meeting, Proxy
Statement and Proxy are being mailed to stockholders on or about March 18, 2002.

The presence in person or by proxy of the holders of record of a majority of
the shares of the Fund issued and outstanding and entitled to vote thereat shall
constitute a quorum at the Meeting. If, however, such quorum shall not be
present or represented at the Meeting or if fewer shares are present in person
or by proxy than is the minimum required to take action with respect to any
proposal presented at the Meeting, the holders of a majority of the shares of
the Fund present in person or by proxy shall have the power to adjourn the
Meeting from time to time, without notice other than announcement at the
Meeting, until the requisite amount of shares entitled to vote at the Meeting
shall be present. At any such adjourned Meeting, if the relevant quorum is
subsequently constituted, any business may be transacted which might have been
transacted at the Meeting as originally called. For purposes of determining the
presence of a quorum for transacting business at the Meeting, abstentions and
broker 'non-votes' (that is, proxies from brokers or nominees indicating that
such persons have not received instructions from the beneficial owner or other
persons entitled to vote shares on a particular matter with respect to which the
brokers or nominees do not have discretionary power) will be treated as shares
that are present but which have not been voted. For this reason, abstentions and
broker non-votes will have the effect of a 'no' vote for purposes of obtaining
the requisite approval of each proposal.

The Board of Directors has fixed the close of business on March 11, 2002 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Meeting. The outstanding voting shares of the Fund as of
March 11, 2002 consisted of 25,172,083.1709 shares of common stock and 5,000
Auction Rate Cumulative Preferred Shares, liquidation preference $25,000 per
share, each share being entitled to one vote. All properly executed proxies
received prior to the Meeting will be voted at the Meeting in accordance with
the instructions marked thereon or as otherwise provided therein.

Accordingly, unless instructions to the contrary are marked, proxies will be
voted for the election of the Director and for the ratification of the selection
of PricewaterhouseCoopers LLP as the Fund's independent certified public
accountants for its fiscal year ending December 31, 2002. Any stockholder may
revoke his proxy at any time prior to exercise thereof by giving written notice
to the Secretary of the Fund at its offices at 757 Third Avenue, New York, New
York 10017, or by signing another proxy of a later date or by personally casting
his vote at the Meeting.

The most recent annual and semi-annual reports of the Fund, including
financial statements, have been previously mailed to stockholders. If you have
not received these reports or would like to receive additional copies free of
charge, please contact the Fund at 757 Third Avenue, New York, New York 10017,
(800) 330-REIT, and they will be sent promptly by first-class mail.

PROPOSAL ONE
ELECTION OF DIRECTORS

At the Meeting, seven Directors will be elected, to serve for a term of one,
two or three years, as the case may be, and until his or her successor is duly
elected and qualified. The nominees are George Grossman and Robert H. Steers,
for terms to expire in 2003; Martin Cohen and Richard J. Norman, for terms to
expire in 2004; and Gregory C. Clark, Bonnie Cohen and Willard H. Smith, Jr.,
for terms to expire in 2005. In addition to the Fund, each nominee also
currently serves as Director of the six other funds within the Cohen & Steers
Fund Complex. It is the intention of the persons named in the enclosed proxy to
nominate and vote in favor of the nominees.

Because the Directors are being elected to serve staggered terms, the term
of office of only a single class of Directors will expire each year. As a result
of this system, only those Directors in any one class may be changed in any one
year, and it would require two years or more to change a majority of the Board
of Directors. This system of electing Directors, which may be regarded as an
'anti-takeover' provision, may have the effect of maintaining the continuity of
management and, thus, make it more difficult for the Fund's stockholders to
change the majority of Directors.

The nominees have consented to serve as Directors. The Board of Directors of
the Fund knows of no reason why the nominee would be unable to serve, but in the
event of such unavailability, the proxies received will be voted for such
substitute nominee as the Board of Directors may recommend.

Certain information concerning the nominees is set forth as follows:

<Table>
<Caption>
NUMBER OF
FUNDS
WITHIN
FUND
COMPLEX
OVERSEEN BY
PRINCIPAL OCCUPATION DURING PAST DIRECTOR
POSITION HELD FIVE YEARS (INCLUDING OTHER LENGTH OF TERM (INCLUDING
NAME, ADDRESS AND AGE WITH FUND DIRECTORSHIPS HELD) TIME SERVED OF OFFICE THE FUND)
--------------------- --------- ------------------- ----------- --------- ---------

Disinterested Directors
Gregory C. Clark ............. Director Private Investor. Prior Since 2001 2005'D' 7
376 Mountain Laurel Drive thereto, President of
Aspen, Colorado Wellspring Management Group,
Age: 55 Inc. (investment advisory firm)
Bonnie Cohen ................. Director Consultant. Prior thereto, Since 2001 2005'D' 7
1824 Phelps Place, N.W. Undersecretary of State, United
Washington, D.C. States Department of State.
Age: 59
</Table>

(table continued on next page)

(table continued from previous page)

George Grossman .............. Director Attorney-at-Law. Since 2001 2003'D' 7
17 Elm Place
Rye, New York
Age: 48
Richard J. Norman ............ Director Private Investor. Prior thereto, Since 2001 2004'D' 7
7520 Hackamore Drive Investment Representative of
Potomac, Maryland Morgan Stanley Dean Witter.
Age: 58
Willard H. Smith Jr. ........ Director Board member of Essex Property Since 2001 2005'D' 7
5208 Renaissance Avenue Trust, Inc., Highwoods
San Diego, California Properties, Inc. and Realty
Age: 65 Income Corporation. Managing
Director at Merrill Lynch & Co.,
Equity Capital Markets Division,
from 1983 to 1995.
Interested Directors
Martin Cohen ................. Director, President President of Cohen & Steers Since 2001 2004'D' 7
757 Third Avenue and Treasurer Capital Management, Inc., the
New York, New York Fund's Investment Manager.
Age: 53
Robert H. Steers ............. Director, Chairman Chairman of Cohen & Steers Since 2001 2003'D' 7
757 Third Avenue and Secretary Capital Management, Inc., the
New York, New York Fund's Investment Manager.
Age: 49
</Table>

- ---------

* Member of the Audit Committee.

** 'Interested person,' as defined in the Investment Company Act of 1940, of the
Fund because of the affiliation with Cohen & Steers Capital Management, Inc.,
the Fund's investment manager.

'D' If elected at the Meeting.

Martin Cohen and Bonnie Cohen are unrelated.

During the Fund's fiscal year ended December 31, 2001, the Board of
Directors met three times. All of such Directors attended all of the meetings of
the Board of Directors, except Ms. Cohen and Mr. Norman, who attended the one
meeting held after their election to the Board of Directors. The Fund maintains
one Standing Board Committee, the Audit Committee of the Board of Directors,
which is composed of all the Directors who are not 'interested persons' of the
Fund within the meaning of the Investment Company Act of 1940 (the 'Act'). The
Audit Committee, which met once during the fiscal year ended December 31, 2001,
assists the Board of Directors in its oversight of the Fund's financial
reporting process. The Audit Committee meets with the Fund's independent
auditors to discuss the scope of the engagement, review the Fund's financial
statements, and discuss the statements and audit results with management. The
Audit Committee discussed with PricewaterhouseCoopers LLP the matters required
to be discussed by Statement on Auditing Standards 61, received the written
disclosures and the letter from PricewaterhouseCoopers LLP required by
Independence Standards Board Standard No. 1, and discussed with
PricewaterhouseCoopers LLP the independent auditor's independence. Based on
these reviews and discussions, the Audit Committee recommended to the

Board of Directors that the audited financial statements be included in the
Fund's annual report to shareholders. The Board of Directors has adopted for the
Audit Committee a written charter, a copy of which is included as an appendix to
this proxy statement. The members of the Audit Committee also meet the
independence requirements of the New York Stock Exchange's listing standards.

Directors of the Fund who are not interested persons of the Fund are paid an
annual retainer of $5,500 and a fee of $500 for each meeting attended and are
reimbursed for the expenses of attendance at such meetings and, for the fiscal
year ended December 31, 2001, such fees and expenses paid by the Fund totaled
$16,600.

As of March 11, 2002, the Directors and officers of the Fund as a group
owned less than 1% of the shares of the Fund.

The following table provides information concerning the dollar range of the
Fund's equity securities owned by each Director and the aggregate dollar range
of securities owned in the Cohen & Steers Fund Complex by each Director.

<Table>
<Caption>
AGGREGATE DOLLAR RANGE OF
DOLLAR RANGE OF EQUITY EQUITY SECURITIES IN THE
SECURITIES IN THE FUND AS OF COHEN & STEERS FUND COMPLEX
MARCH 11, 2002 AS OF MARCH 11, 2002
-------------- --------------------

Robert H. Steers............................ Over $100,000 Over $100,000
Martin Cohen................................ Over $100,000 Over $100,000
Gregory C. Clark............................ $50,000 - $100,000 Over $100,000
Bonnie Cohen................................ $10,001 - $50,000 $50,001 - $100,000
George Grossman............................. None $10,001 - $50,000
Richard J. Norman........................... $10,001 - $50,000 Over $100,000
William H. Smith Jr. ....................... $10,001 - $50,000 $10,001 - $50,000
</Table>

COMPENSATION OF DIRECTORS AND OFFICERS. The following table sets forth
information regarding compensation of Directors by the Fund and by the fund
complex of which the Fund is a part for the fiscal year ended December 31, 2001.
Officers of the Fund and Directors who are interested persons of the Fund do not
receive any compensation from the Fund or any other fund in the fund complex
which is a U.S. registered investment company. In the column headed 'Total
Compensation to Directors by Fund Complex,' the compensation paid to each
director represents the six funds that each director served in the fund complex
during 2001. The Directors do not receive any pension or retirement benefits
from the Fund Complex.

COMPENSATION TABLE
FISCAL YEAR ENDED DECEMBER 31, 2001

<Table>
<Caption>
TOTAL
AGGREGATE COMPENSATION
COMPENSATION PAID TO
FROM DIRECTORS BY
NAME OF PERSON, POSITION REGISTRANT FUND COMPLEX
------------------------ ---------- ------------

Gregory C. Clark*, Director................................. $3,750 $41,250
Bonnie Cohen................................................ $ $11,250***
Martin Cohen**, Director and President...................... $ 0 $ 0
George Grossman*, Director.................................. $3,750 $41,250
Richard J. Norman*, Director................................ $ $11,250***
Willard H. Smith*, Director................................. $3,750 $41,250
Robert H. Steers**, Director and Chairman................... $ 0 $ 0
</Table>

- ---------

* Member of the Audit Committee.

** 'Interested person,' as defined in the Act, of the Fund because of the
affiliation with Cohen & Steers Capital Management, Inc., the Fund's
investment manager.

*** Ms. Cohen and Mr. Norman were elected as Directors of the fund complex on
December 3, 2001.

-------------------
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of
the Securities Exchange Act of 1934 (the 'Exchange Act') and Section 30(h) of
the 1940 Act, as applied to the Fund, require the Fund's officers, Directors and
investment adviser, affiliates of the investment adviser, and persons who
beneficially own more than 10% of a registered class of the Fund's outstanding
securities ('Reporting Persons') to file reports of ownership of the Fund's
securities and changes in such ownership with the Securities and Exchange
Commission and the New York Stock Exchange. Such persons are required by
Securities and Exchange Commission regulations to furnish the fund with copies
of all such filings.

Based upon its review of the copies of such forms received by it, the Fund
believes that, during the fiscal year ended December 31, 2001, all filing
requirements applicable to its Reporting Persons were met.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS OF THE FUND VOTE FOR
THE ELECTION OF EACH NOMINEE TO SERVE AS A DIRECTOR OF THE FUND.

PROPOSAL TWO
RATIFICATION OR REJECTION OF SELECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors recommends that the stockholders of the Fund ratify
the selection of PricewaterhouseCoopers LLP, independent certified public
accountants, to audit the accounts of the Fund for the fiscal year ending
December 31, 2002. Their selection was approved by the vote, cast in person, of
a majority of the Directors of the Fund, including a majority of the Directors
who are not 'interested persons' of the Fund within the meaning of the Act, at a
meeting held on March 5, 2002. PricewaterhouseCoopers LLP has audited the
accounts of the Fund since prior to the Fund's commencement of business on
May 31, 2001 and does not have any direct financial interest or any material
indirect financial interest in the Fund. A representative of
PricewaterhouseCoopers LLP is

expected to be available for the Meeting and to have the opportunity to make a
statement and respond to appropriate questions from the stockholders. The Audit
Committee of the Board of Directors meets twice each year with representatives
of PricewaterhouseCoopers LLP to discuss the scope of their engagement, and
review the financial statements of the Fund and the results of their examination
thereof.

FEES PAID TO PRICEWATERHOUSECOOPERS LLP

AUDIT FEES. The Fund paid PricewaterhouseCoopers LLP $35,500 to audit the
Fund's financial statements for the fiscal year ended December 31, 2001.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. There were no
fees paid to PricewaterhouseCoopers LLP during the fiscal year ended
December 31, 2001 by the Fund or Cohen & Steers Capital Management, Inc., or any
affiliate that provided services to the Fund, for financial information systems
design and implementation.

ALL OTHER FEES. The aggregate fees billed for all other non-audit services,
including fees for tax-related services rendered to the Fund, services related
to the Fund's start-up and services related to reports filed by the Fund with
certain rating agencies, and other services rendered to Cohen & Steers Capital
Management, Inc. or any affiliate that provided services to the Fund, were
$200,015 for the fiscal year ended December 31, 2001.

The Audit Committee of the Fund's Board of Directors considered and
concluded that the provision of these services is compatible with maintaining
the independence of PricewaterhouseCoopers LLP.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS OF THE FUND VOTE FOR
THE RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS OF THE FUND.

CERTAIN INFORMATION REGARDING THE INVESTMENT MANAGER AND
THE ADMINISTRATOR

The Fund has retained Cohen & Steers Capital Management, Inc., a New York
corporation with offices at 757 Third Avenue, New York, New York 10017, to serve
as its investment manager and administrator (the 'Adviser') under an investment
management agreement dated May 24, 2001 and an administration agreement, dated
May 24, 2001. Martin Cohen and Robert H. Steers are 'controlling persons' of the
Adviser on the basis of their ownership of more than 10% of the Adviser's stock.
Their address is 757 Third Avenue, New York, New York 10017. State Street Bank
and Trust Company, with offices at 225 Franklin Street, Boston, Massachusetts
02110, serves as sub-administrator to the Fund.

OFFICERS OF THE FUND

The principal officers of the Fund and their principal occupations during
the past five years are set forth below. The address of each of the following
persons is 757 Third Avenue, New York, New York 10017.

Robert H. Steers, Chairman and Secretary (see Proposal One, 'Election of
Directors,' at page 3 for biographical information).

Martin Cohen, President and Treasurer (see Proposal One, 'Election of
Directors,' at page 3 for biographical information).

Adam M. Derechin, Vice President and Assistant Treasurer, age 37, joined the
Advisor in 1993 and has been a Senior Vice President since 1998 and prior to
that was a Vice President since 1995.

Lawrence B. Stoller, Assistant Secretary, age 38, joined the Advisor in 1999
as Senior Vice President and General Counsel. For the five years prior to that
time, he was Associate General Counsel at Neuberger Berman Management Inc.
(1998-1999) and Assistant General Counsel of The Dreyfus Corporation
(1995-1998).

SUBMISSION OF PROPOSALS FOR THE NEXT
ANNUAL MEETING OF STOCKHOLDERS

Proposals of stockholders intended to be presented at the next annual
meeting of stockholders must be received by the Fund by November 15, 2002 for
inclusion in the Fund's proxy statement and form of proxy relating to that
meeting.

OTHER MATTERS

Management does not know of any matters to be presented at the Meeting other
than those mentioned in this Proxy Statement. If any of the persons listed above
is unavailable for election as a director, an event not now anticipated, or if
any other matters properly come before the Meeting, the shares represented by
proxies will be voted with respect thereto in accordance with the best judgment
of the person or persons voting the proxies.

VOTES REQUIRED

The presence in person or by proxy of the holders of one-half of the
outstanding shares is required to constitute a quorum at the Meeting. The
election of the Directors, as set forth in Proposal 1, will require a vote of
the holders of a plurality of the Fund's shares present at the Meeting. The vote
of the holders of a plurality of the Fund's Auction Rate Cumulative Preferred
Shares is required to elect Messrs. Cohen and Smith, who have been designated as
representing the holders of the Fund's Auction Rate Cumulative Preferred Shares.
Ratification of the selection of the independent certified public accountants,
as set forth in Proposal 2, will require a majority of the votes cast at the
Meeting.

If the accompanying form of proxy is executed properly and returned, shares
represented by it will be voted at the Meeting in accordance with the
instructions on the proxy. However, if no instructions are specified, shares
will be voted for the election of the Directors and for the other proposals.

By order of the Board of Directors,

ROBERT H. STEERS
ROBERT H. STEERS
Secretary

March 18, 2002
New York, New York

APPENDIX A

AUDIT COMMITTEE CHARTER

STATEMENT OF POLICY

The Audit Committee shall oversee the Fund's accounting and financial
reporting policies and practices and its internal controls. The Audit Committee
shall oversee the quality and objectivity of the Fund's financial statements and
the independent audit of the financial statements. The Audit Committee shall
also act as a liaison between the Fund's independent accountants and the Board
of Directors.

The Audit Committee's role is limited to oversight. Fund management is
responsible for Fund accounting and internal control systems, and the
independent accountants are responsible for conducting a proper audit of the
Fund's financial statements. The independent accountants are ultimately
accountable to the Fund's Board of Directors and the Audit Committee.

MEMBERSHIP

The Audit Committee shall be comprised of as many directors as the Board of
Directors shall determine, but in any event no less than three. No member shall
be an 'interested person' of the Fund, as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended. In addition, each member of the
Audit Committee shall also meet the requirements of being 'Independent,' as
defined in the New York Stock Exchange Listed Company Manual 'SS'303.01,
and shall be free of any relationship that, in the judgment of the Board of
Directors, may interfere with the exercise of his or her independent
judgment.(1)

Each member of the Audit Committee shall be financially literate, as such
qualification is interpreted by the Fund's Board of Directors in its business
judgment.(2)

- ---------
(1) The National Association of Securities Dealers, Inc. (the 'NASD') and the
American Stock Exchange ('AMEX') have similar definitions of independence
except that under the subheading 'Business Relationship,' a director who is
a partner in, or controlling shareholder or an executive officer of, any
for-profit business organization of which the Fund made or received payments
(except those payments arising from investments in the Fund's securities)
that exceed 5% of the Fund's gross revenues for that year or $200,000,
whichever is more, in any of the past three years is not independent.
Furthermore, a director who accepts any compensation from the Fund or its
affiliates, in excess of $60,000 during the previous fiscal year, other than
compensation for board service, benefits under a tax qualified retirement
plan or non-discretionary compensation is not independent.

(2) 'Financially literate' would be determined by the Board of Directors under
the NYSE listing requirements while the AMEX and NASD require that the audit
committee members be able to read and understand financial statements,
including the Fund's balance sheet, income statement and cash flow
statement. 'Accounting or related financial management experience' would be
determined by the Board of Directors under the NYSE listing requirements
while the AMEX and NASD require that the person satisfying the requirement
has past employment experience in finance or accounting, a requisite
professional certification in accounting, or any other comparable experience
or background which results in the individuals's financial sophistication,
including being or having been a chief executive officer, chief financial
officer or other senior officer with financial oversight responsibilities.

A-1

At least one member of the Audit Committee must have accounting or related
financial management expertise, as the Board of Directors interprets such
qualification in its business judgment.(3)

RESPONSIBILITIES AND DUTIES

The Audit Committee policies and procedures shall remain flexible to
facilitate the Audit Committee's ability to react to changing conditions and to
generally discharge its functions. The following responsibilities describe areas
of attention in broad terms.

THE AUDIT COMMITTEE SHALL:

1. Recommend the selection, retention or termination of the Fund's
independent accountants based on an evaluation of their independence and the
nature and performance of the audit and other services. The Audit Committee and
the Board of Directors have the ultimate authority and responsibility to select,
evaluate and, where appropriate, replace the outside auditor (or to nominate the
outside auditor to be proposed for shareholder approval in any proxy statement).

2. Receive on a periodic basis formal written disclosures and letters from
the independent accountants as required by the Independence Standards Board
Standard No. 1.(4)

3. Engage in a dialog with the independent accountants and the Board of
Directors concerning any relationships between the independent accountants and
the Fund or any other relationships that might adversely affect the objectivity
and independence of the independent accountants.

4. Review the fees charged by the independent accountants for audit and
other services.

5. Review with the independent accountants arrangements for and the scope
of the annual audit and any special audits including the form of any opinion
proposed to be rendered to the Board of Directors and stockholders.

6. Review with management and the independent accountants the audited
financial statements, including a discussion with the independent accountants of
matters required by Statement of Accounting Standards No. 61.(5)

- ---------
(3) According to the NASD and AMEX, 'accounting or related financial management
expertise' requires a member who has past employment experience in finance
or accounting, requisite professional certification in accounting, or any
other comparable experience or background which results in the individual's
financial sophistication, including being or having been a chief executive
officer, chief financial officer or other senior officer with financial
oversight responsibilities.

(4) ISB Standard No. 1 generally requires, among other things, that an auditor
(i) disclose to the Audit Committee, in writing, all relationships between
the auditor and its related entities and the company and its related
entities that in the auditor's professional judgment may reasonably be
thought to bear on independence; (ii) confirm in the letter that, in its
professional judgment, it is independent of the company within the meaning
of the Securities Act of 1933, as amended and the Securities Exchange Act of
1934; and (iii) discuss the auditor's independence with the audit committee.

(5) SAS No. 61 ('Communication with Audit Committees') requires independent
auditors to inform the audit committee of certain matters, including among
others, (i) methods used to account for significant unusual transactions,
(ii) the process used by management in formulating sensitive accounting
estimates on the basis of the auditors' conclusion as to the reasonableness
of those estimates and (iii) disagreements with management over the
application of accounting principles.

A-2

7. Discuss with the independent accountants any matters of concern relating
to the Fund's financial statements.

8. Consider with the independent accountants their comments on the Fund's
accounting and financial reporting policies, practices and internal controls and
management's responses thereto, including the effect on the Fund of any
recommendation of changes in accounting principles or practices by management or
the independent accountants.

9. Investigate any improprieties or suspected improprieties in the Fund's
financial and accounting operations.

10. Provide a report in the Fund's proxy statement disclosing whether the
Audit Committee has fulfilled the duties set forth above in items #2, #3 and #6.

11. Provide a statement whether, based on its review of the Fund's audited
financial statements, the Audit Committee recommends to the Board of Directors
that the audited financial statements be included in the Fund's Annual Report.

12. Report to the Board of Directors regularly on the Audit Committee's
activities and make any necessary recommendations as to the Fund's accounting
and financial reporting policies, practices and its internal controls.

13. Review and reassess the adequacy of this Charter at least annually and
recommend any changes to the Board of Directors.

14. Review with counsel legal and regulatory matters that have a material
impact on the Fund's financial and accounting reporting policies, practices or
its internal controls.

15. Perform such other functions consistent with this Charter, the Fund's
By-laws and governing law, as the Audit Committee or the Board of Directors
deems necessary or appropriate.

MEETINGS

The Audit Committee shall meet at least once annually with the independent
accountants (outside the presence of Fund management) and at least once annually
with the representatives of Fund management responsible for the financial and
accounting operations of the Fund. The Audit Committee shall hold special
meetings when and if circumstances require.

OUTSIDE RESOURCES AND ASSISTANCE FROM MANAGEMENT

The appropriate officers of the Fund shall provide or arrange to provide
such information, data and services as the Audit Committee may request. The
Audit Committee shall have the authority to discharge its responsibility,
including the authority to retain counsel and other experts and consultants
whose expertise would be considered helpful to the Audit Committee, at the
expense of the Fund, recognizing, however, that the Fund's management may
reimburse the Fund for this expense to the extent that an expense reimbursement
program may be in effect.

A-3

ANNEX A

NEW YORK STOCK EXCHANGE LISTED COMPANY MANUAL 'SS'303.01

(2) Composition/Expertise Requirement of Audit Committee Members.

(a) Each audit committee shall consist of at least three directors, all
of whom have no relationship to the company that may interfere with the
exercise of their independence from management and the company
('Independent').

(3) Independence Requirement of Audit Committee Members. In addition to the
definition of Independent provided above in (2)(a), the following restrictions
shall apply to every audit committee member:

(a) Employees. A director who is an employee (including non-employee
executive officers) of the company or any of its affiliates may not serve on
the audit committee until three years following the termination of his or
her employment. In the event the employment relationship is with a former
parent or predecessor of the company, the director could serve on the audit
committee after three years following the termination of the relationship
between the company and the former parent or predecessor.

(b) Business Relationship. A director (i) who is a partner, controlling
shareholder, or executive officer of an organization that has a business
relationship with the company, or (ii) who has a direct business
relationship with the company (e.g., a consultant) may serve on the audit
committee only if the company's Board of Directors determines in its
business judgment that the relationship does not interfere with the
director's exercise of independent judgment. In making a determination
regarding the independence of a director pursuant to this paragraph, the
Board of Directors should consider, among other things, the materiality of
the relationship to the company, to the director, and, if applicable, to the
organization with which the director is affiliated.

'Business relationships' can include commercial, industrial, banking,
consulting, legal, accounting and other relationships. A director can have this
relationship directly with the company, or the director can be a partner,
officer or employee of an organization that has such a relationship. The
director may serve on the audit committee without the above-referenced Board of
Directors' determination after three years following the termination of, as
applicable, either (1) the relationship between the organization with which the
director is affiliated and the company, (2) the relationship between the
director and his or her partnership status, shareholder interest or executive
officer position, or (3) the direct business relationship between the director
and the company.

(c) Cross Compensation Committee Link. A director who is employed as an
executive of another corporation where any of the company's executives
serves that corporation's compensation committee may not serve on the audit
committee.

(d) Immediate Family. A director who is an Immediate Family member of
an individual who is an executive officer of the company or any of its
affiliates cannot serve on the audit committee until three years following
the termination of such employment relationship. See para. 303.02 for
definition of 'Immediate Family.'

A-4

APPENDIX 1

COHEN & STEERS ADVANTAGE INCOME REALTY FUND, INC

757 THIRD AVENUE
NEW YORK, NEW YORK 10017

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

Revoking any such prior appointments, the undersigned appoints Jay J. Chen and
Lawrence B. Stoller (or, if only one shall act, then that one) proxies with the
power of substitution to vote all the common stock of Cohen & Steers
Advantage Income Realty Fund, Inc. (the "Fund") registered in the name of the
undersigned at the Annual Meeting of Stockholders to be held at the offices of
Cohen & Steers Capital Management, Inc., 757 Third Avenue, New York 10017 on
April 24, 2002 at 10:00 a.m., and at any adjournments thereof.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY IN THE ENCLOSED ENVELOPE.

Please sign exactly as your name(s) appear(s) on the books of the Fund. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ---------------------------- ---------------------------
- ---------------------------- ---------------------------
- ---------------------------- ---------------------------

[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

- ------------------------------------------------
COHEN & STEERS ADVANTAGE INCOME REALTY FUND, INC.
- ------------------------------------------------

Mark box at right if an address change or comment has been noted on
the reverse side of this card. [ ]

1. Election of Directors.

GREGORY C. CLARK
BONNIE COHEN
MARTIN COHEN
GEORGE GROSSMAN
RICHARD J. NORMAN
WILLARD H. SMITH, JR.
ROBERT H. STEERS

FOR ALL FOR ALL
NOMINEES WITHHOLD EXCEPT
[ ] [ ] [ ]

NOTE: IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE, MARK THE
"FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE NAME OF THE NOMINEE. YOUR
SHARES WILL BE VOTED FOR THE REMAINING NOMINEE.

2. To ratify the appointment of PricewaterhouseCoopers LLP as independent
Certified Public Accountants of the Fund for the fiscal year ending December
31, 2002.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

3. To transact such other business as may properly come before the meeting.

Please be sure to sign and date this Proxy.

- - ----------------------------------------
Date

- - ----------------------------------------
Stockholder sign here

- - ----------------------------------------
Co-owner sign here

THE SHARES OF COMMON STOCK REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH THE SPECIFICATIONS MADE ABOVE. IF NO SPECIFICATIONS ARE MADE, SUCH SHARES
WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR AND FOR PROPOSAL 2.

APPENDIX 2

COHEN & STEERS ADVANTAGE INCOME REALTY FUND, INC

757 THIRD AVENUE
NEW YORK, NEW YORK 10017

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

Revoking any such prior appointments, the undersigned appoints Jay J. Chen and
Lawrence B. Stoller (or, if only one shall act, then that one) proxies with the
power of substitution to vote all the common stock of Cohen & Steers Advantage
Income Realty Fund, Inc. (the "Fund") registered in the name of the undersigned
at the Annual Meeting of Stockholders to be held at the offices of Cohen &
Steers Capital Management, Inc., 757 Third Avenue, New York 10017 on April 24,
2002 at 10:00 a.m., and at any adjournments thereof.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY IN THE ENCLOSED ENVELOPE.

[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE

- ------------------------------------------------
COHEN & STEERS ADVANTAGE INCOME REALTY FUND, INC.
- ------------------------------------------------

Mark box at right if an address change or comment has been noted on
the reverse side of this card. [ ]

1. Election of Directors.

GREGORY C. CLARK
BONNIE COHEN
MARTIN COHEN
GEORGE GROSSMAN
RICHARD J. NORMAN
WILLARD H. SMITH, JR.
ROBERT H. STEERS

FOR ALL FOR ALL
NOMINEES WITHHOLD EXCEPT
[ ] [ ] [ ]

2. To ratify the appointment of PricewaterhouseCoopers LLP as independent
Certified Public Accountants of the Fund for the fiscal year ending December
31, 2002.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

3. To transact such other business as may properly come before the meeting.

Please be sure to sign and date this Proxy.

- - ----------------------------------------
Date

- - ----------------------------------------
Stockholder sign here

- - ----------------------------------------
Co-owner sign here

THE AUCTION RATE CUMULATIVE PREFERRED SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ABOVE. IF NO SPECIFICATIONS ARE
MADE, SUCH SHARES WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR
AND FOR PROPOSAL 2.

STATEMENT OF DIFFERENCES

The section symbol shall be expressed as....................................'SS'
The dagger symbol shall be expressed as.....................................'D'